Cell C's head office in Johannesburg. (Gareth van Zyl)
Johannesburg – South Africa’s third largest mobile network Cell C says
its board has accepted an offer from Blue Label Telecoms [JSE:BLU] to acquire 35% of the
company for R4bn.
The boards of Cell C and its holding company 3C Telecommunications have
also accepted an offer from Cell C management and staff to hold about 30% of the mobile network's shares for R2.5bn.
The board approval comes after Cell C announced earlier this
month that it received offers to recapitalise the company – a move that is
expected to reduce net debt to R8bn or less when implemented.
Meanwhile, current Cell C shareholder 3C Telecommunications also
plans to hold about 35% of the total issued shares at the close of the
recapitalisation, a Cell C statement read on Wednesday.
transaction will not only benefit Cell C and empower its staff, but more
importantly, it will solidify Cell C’s assurance to its customers to provide
the most innovative products and services, backed by continued growth and
investment in its network,” said chairman of Cell C Mohammed Hariri in a
recapitalisation of Cell C is still subject to all parties securing funding and
obtaining regulatory approvals. But if successful, the expected effective
date of the recapitalisation is June 1 2016, Cell C said.
The recapitalisation is further
expected to result in the current major stakeholder in Cell C, Dubai-based Oger
Telecom, diluting its stake from 75% to approximately 27%, according to a recent report on technology news website TechCentral.
Johannesburg listed Blue Label
distributes prepaid airtime, starter packs, data and electricity tokens. It
also specialises in transactional offerings such as ticketing and financial
services. Cell C is South Africa’s third largest network with 22 million
Blue Label’s interest in acquiring a
stake in Cell C was made public after fixed-line telecoms company Telkom [JSE:TKG] last month announced that it had abandoned
talks to buy Oger Telecom’s stake in Cell C.